The Totally Made Up Spectrum Crisis

Wireless carriers are begging the government to give them more spectrum, claiming a coming shortage because of data-hungry cell-phone users. "The wireless carriers say that in the next few years they may not have enough of it to meet the exploding demands for mobile data," writes Brian X. Chen in The New York Times. "The result, they ominously warn, may be slower or spotty connections on smartphones and tablets. They imply in carefully couched language that, given the laws of supply and demand, the price of cellphone service will soar," he continues. Yet, today, Verizon announced it would sell-off some of its spectrum. What gives? The idea of a spectrum shortage sounds scary for consumers indeed. But, a closer look shows that this isn't a crisis for you, it's a crisis for carriers.

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The wireless spectrum is getting more crowded as smartphones get more popular. Last June, data usage was up 89 percent over the previous 12 months, and carriers have implemented throttling policies for power-users, ensuring there's enough to go around. But this "problem" is not a real problem, say scientists and engineers, because technology will adapt, rather than just accept slow or expensive cell phones. In a separate video, The New York Times gives some examples of how innovation might fix this issue: design smarter, better phones, piggy back on existing technologies like WiFi or broadband, or use the spectrum more efficiently. 4G for example, is more efficient than 3G. "Somehow in the last 100 years, every time there is a problem of getting more spectrum, there is a technology that comes along that solves that problem," Martin Cooper, the inventor of the cell phone, told Chen. It happened with radio, TV, and earlier generation cell-phones.

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So what then is this "crisis," why bother begging the FCC for more? As Chen notes: "When a company gets the license for a band of radio waves, it has the exclusive rights to use it. Once a company owns it, competitors can’t have it." This is about making sure the other guy doesn't get the good stuff. "The carriers haven’t advocated for the newer technologies because they want to retain their monopolies."

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That's why Verizon is both in the buying and selling business when it comes to spectrum. The spectrum sell off announced today is an attempt to get a monopoly on another part of the spectrum it deems more valuable."Verizon said in a statement today that if it's given approval to buy the cable operators' spectrum it will sell some of its own spectrum in the A and B block of the 700MHz frequency band, which it bought in an government auction in 2008," explains CNET's Marguerite Reardon. This "cable operators' spectrum" is called AWS spectrum, which runs mobile voice and data services for a slew of popular phones. If the FCC accepts this deal, approving the AWS sale, Verizon will use the new stuff for its 4G LTE network, giving it a leg up on competitors, who can't have access to this chunk of speed.

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As long as Verizon makes its spectrum, faster that's good, though, right? At least for Verizon customers? No. It hinders the innovation that could stave off the coming crisis and also gives Verizon a monopoly. "Recent history of such spectrum sell-offs shows that when Verizon and AT&T sell off spectrum, it's Verizon who buys AT&T's, and vice versa," Harold Feld, legal director at Public Knowledge a digital rights organization told Reardon. "Having AT&T buy Verizon spectrum in this instance would do nothing to help consumers," he continued.

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The mobile carriers don't see technology as a viable solution, claiming bandwidth needs are real. "They’re all Band-Aids, and you have to provide additional spectrum to deal with the wound to deal with the large capacity of bandwidth demands,” Kathleen Ham, vice president for federal regulatory affairs of T-Mobile USA, told Chen.